[Congressional Record Volume 159, Number 50 (Monday, April 15, 2013)]
[House]
[Pages H2001-H2004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONTRACTING AND TAX ACCOUNTABILITY ACT OF 2013
Mr. ISSA. Mr. Speaker, I move to suspend the rules and pass the bill
(H.R. 882) to prohibit the awarding of a contract or grant in excess of
the simplified acquisition threshold unless the prospective contractor
or grantee certifies in writing to the agency awarding the contract or
grant that the contractor or grantee has no seriously delinquent tax
debts, and for other purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 882
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Contracting and Tax
Accountability Act of 2013''.
SEC. 2. GOVERNMENTAL POLICY.
It is the policy of the United States Government that no
Government contracts or grants should be awarded to
individuals or companies with seriously delinquent Federal
tax debts.
SEC. 3. DISCLOSURE AND EVALUATION OF CONTRACT OFFERS FROM
DELINQUENT FEDERAL DEBTORS.
(a) In General.--The head of any executive agency that
issues an invitation for bids or a request for proposals for
a contract in an amount greater than the simplified
acquisition threshold shall require each person that submits
a bid or proposal to submit with the bid or proposal a form--
(1) certifying that the person does not have a seriously
delinquent tax debt; and
(2) authorizing the Secretary of the Treasury to disclose
to the head of the agency information limited to describing
whether the person has a seriously delinquent tax debt.
(b) Impact on Responsibility Determination.--The head of
any executive agency, in evaluating any offer received in
response to a solicitation issued by the agency for bids or
proposals for a contract, shall consider a certification that
the offeror has a seriously delinquent tax debt to be
definitive proof that the offeror is not a responsible source
as defined in section 113 of title 41, United States Code.
(c) Debarment.--
(1) Requirement.--Except as provided in paragraph (2), the
head of an executive agency shall initiate a suspension or
debarment proceeding against a person after receiving an
offer for a contract from such person if--
(A) such offer contains a certification (as required under
subsection (a)(1)) that such person has a seriously
delinquent tax debt; or
(B) the head of the agency receives information from the
Secretary of the Treasury (as authorized under subsection
(a)(2)) demonstrating that such a certification submitted by
such person is false.
(2) Waiver.--The head of an executive agency may waive
paragraph (1) with respect to a person based upon a written
finding of urgent and compelling circumstances significantly
affecting the interests of the United States. If the head of
an executive agency waives paragraph (1) for a person, the
head of the agency shall submit to Congress, within 30 days
after the waiver is made, a report containing the rationale
for the waiver and relevant information supporting the waiver
decision.
(d) Release of Information.--The Secretary of the Treasury,
in consultation with the Director of the Office of Management
and Budget, shall make available to all executive agencies a
standard form for the authorization described in subsection
(a).
(e) Revision of Regulations.--Not later than 270 days after
the date of enactment of this subsection, the Federal
Acquisition Regulation shall be revised to incorporate the
requirements of this section.
[[Page H2002]]
SEC. 4. DISCLOSURE AND EVALUATION OF GRANT APPLICATIONS FROM
DELINQUENT FEDERAL DEBTORS.
(a) In General.--The head of any executive agency that
offers a grant in excess of an amount equal to the simplified
acquisition threshold shall require each person applying for
a grant to submit with the grant application a form--
(1) certifying that the person does not have a seriously
delinquent tax debt; and
(2) authorizing the Secretary of the Treasury to disclose
to the head of the executive agency information limited to
describing whether the person has a seriously delinquent tax
debt.
(b) Impact on Determination of Financial Stability.--The
head of any executive agency, in evaluating any application
for a grant offered by the agency, shall consider a
certification that the grant applicant has a seriously
delinquent tax debt to be definitive proof that the applicant
is high-risk and, if the applicant is awarded the grant,
shall take appropriate measures under guidelines issued by
the Office of Management and Budget for enhanced oversight of
high-risk grantees.
(c) Debarment.--
(1) Requirement.--Except as provided in paragraph (2), the
head of an executive agency shall initiate a suspension or
debarment proceeding against a person after receiving a grant
application from such person if--
(A) such application contains a certification (as required
under subsection (a)(1)) that such person has a seriously
delinquent tax debt; or
(B) the head of the agency receives information from the
Secretary of the Treasury (as authorized under subsection
(a)(2)) demonstrating that such a certification submitted by
such person is false.
(2) Waiver.--The head of an executive agency may waive
paragraph (1) with respect to a person based upon a written
finding of urgent and compelling circumstances significantly
affecting the interests of the United States. If the head of
an executive agency waives paragraph (1) for a person, the
head of the agency shall submit to Congress, within 30 days
after the waiver is made, a report containing the rationale
for the waiver and relevant information supporting the waiver
decision.
(d) Release of Information.--The Secretary of the Treasury,
in consultation with the Director of the Office of Management
and Budget, shall make available to all executive agencies a
standard form for the authorization described in subsection
(a).
(e) Revision of Regulations.--Not later than 270 days after
the date of the enactment of this section, the Director of
the Office of Management and Budget shall revise such
regulations as necessary to incorporate the requirements of
this section.
SEC. 5. DEFINITIONS AND SPECIAL RULES.
For purposes of this Act:
(1) Person.--
(A) In general.--The term ``person'' includes--
(i) an individual;
(ii) a partnership; and
(iii) a corporation.
(B) Exclusion.--The term ``person'' does not include an
individual seeking assistance through a grant entitlement
program.
(C) Treatment of certain partnerships.--A partnership shall
be treated as a person with a seriously delinquent tax debt
if such partnership has a partner who--
(i) holds an ownership interest of 50 percent or more in
that partnership; and
(ii) has a seriously delinquent tax debt.
(D) Treatment of certain corporations.--A corporation shall
be treated as a person with a seriously delinquent tax debt
if such corporation has an officer or a shareholder who--
(i) holds 50 percent or more, or a controlling interest
that is less than 50 percent, of the outstanding shares of
corporate stock in that corporation; and
(ii) has a seriously delinquent tax debt.
(2) Executive agency.--The term ``executive agency'' has
the meaning given such term in section 133 of title 41,
United States Code.
(3) Seriously delinquent tax debt.--
(A) In general.--The term ``seriously delinquent tax debt''
means an outstanding Federal debt under the Internal Revenue
Code of 1986 for which a notice of lien has been filed in
public records pursuant to section 6323 of such Code.
(B) Exceptions.--Such term does not include--
(i) a debt that is being paid in a timely manner pursuant
to an agreement under section 6159 or section 7122 of such
Code; and
(ii) a debt with respect to which a collection due process
hearing under section 6330 of such Code, or relief under
subsection (a), (b), or (f) of section 6015 of such Code, is
requested or pending.
SEC. 6. EFFECTIVE DATE.
This Act shall apply with respect to contracts and grants
awarded on or after the date occurring 270 days after the
date of the enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
California (Mr. Issa) and the gentleman from Maryland (Mr. Cummings)
each will control 20 minutes.
The Chair recognizes the gentleman from California.
General Leave
Mr. ISSA. Mr. Speaker, I ask unanimous consent that all Members may
have 5 legislative days within which to revise and extend their remarks
and include extraneous material on the bill under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
There was no objection.
{time} 1730
Mr. ISSA. Mr. Speaker, I yield myself such time as I may consume.
H.R. 882, the Contracting and Tax Accountability Act of 2013, is, in
fact, a broadly bipartisan bill introduced by Mr. Chaffetz of Utah and
Ms. Speier of California. They recognize that, in fact, contractors
and, in a companion bill, individual Federal employees have a high
standard, a high responsibility, and one of the least of those
responsibilities is to pay their taxes in a timely fashion.
Sadly, we discover that, on occasions, we find ourselves with
contractors who have not met that responsibility. Most often, those
contractors, by not meeting that responsibility, may have, in fact, not
deposited the withholding of the very workers who are working on our
behalf.
This kind of irresponsible behavior, although not always found, is
found often enough that GSA contractors are estimated to owe over $3
billion in taxes that are in arrears, and nearly $1.4 billion seriously
in arrears.
The bill makes tax compliance both a prerequisite for receiving a
contract or being an agent and, in fact, recognizes that those who do
not make good on their taxes may, in fact, be seen as eligible for
potential suspension or debarment.
Federal contractors, for the most part, do comply and they do comply
very well. But I believe that what Ms. Speier and Chairman Chaffetz
have done is recognize that we must have zero tolerance for people who,
even after being recognized, and who are seriously behind and
delinquent, continue to resist paying their just taxes.
Again, often these taxes have nothing to do with a debate about
income tax but, rather, withholding that simply wasn't done. These
kinds of contractors are, by definition, the ones also likely to not
live up to the high standard that the taxpayers expect by our
contractors.
With that, I reserve the balance of my time.
Mr. CUMMINGS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I want to, first of all, thank Congressman Chaffetz and
Congresswoman Speier for introducing this very, very important piece of
legislation. And I rise in strong support of H.R. 882, the Contracting
and Tax Accountability Act.
This bill is very similar to legislation passed by the House in the
110th Congress, and I supported it then, and I surely support it now.
The bill enjoys bipartisan support. It is noncontroversial. Last month
it was considered by the Oversight Committee and passed unanimously.
GAO has reported that government contractors owed more than $5
billion in unpaid Federal taxes in 2004 and 2005. Unpaid tax, taxes
owed by contractors, included payroll taxes as well as corporate income
taxes.
GAO has also found that some contractors with unpaid tax debts are
repeat offenders that have failed to pay their taxes over many years,
including, in one case, for almost 20 years.
H.R. 882 would allow the Federal Government to ensure that
contractors seeking to do business with the Federal Government have
paid their taxes before they can receive a Federal contract.
The Federal Acquisition Regulation was revised in 2008 to require
contractors to certify that they do not owe a delinquent tax debt to
the Federal Government. The bill builds on that requirement by
providing Federal agencies the means to verify contractors' claims.
The legislation will also ensure that responsible contractors no
longer have to compete with tax delinquents.
Mr. Speaker, I urge my colleagues to support this important piece of
legislation in order to preserve the fairness in the contracting
process.
I also take a moment to salute our chairman, Mr. Issa, for making
sure that this bill reached the floor. And so with that, we will now be
able to address some of these deadbeat contractors.
[[Page H2003]]
I reserve the balance of my time.
Mr. ISSA. Mr. Speaker, it's now my honor to yield such time as he may
consume to the gentleman from Utah (Mr. Chaffetz), the author of this
bill, a champion for accountability of the Federal workforce and
Federal contractors.
Mr. CHAFFETZ. Mr. Speaker, I thank Chairman Issa for his unyielding
support in pursuit of good government. And I thank him for his support
of this piece of legislation moved forward.
I also thank Ranking Member Cummings, in working with him and his
staff, and certainly with Representative Speier, who also shares his
passion of making sure that contractors are held responsible for their
actions.
Mr. Speaker, today, tens of millions of individuals and corporations
all across America will file their Federal tax returns and pay back any
money they owe the Federal Government.
However, unfortunately, Mr. Speaker, there will be some who fail to
meet this obligation and simply refuse to pay the taxes they owe.
This legislation, H.R. 882, the Contracting and Tax Accountability
Act, has a very simple purpose: to prohibit companies with serious
delinquent Federal tax debts from doing business with the Federal
Government and receiving new Federal contracts. Since Federal
contractors draw compensation and funding from taxpayer dollars, we
must ensure that they are complying with existing laws and paying their
own taxes.
Mr. Speaker, just last month this legislation passed through the
Oversight and Government Reform Committee by voice vote, and it is
identical to legislation that also unanimously passed the committee
last Congress.
Going back a little further, Mr. Speaker, in both the 110th and the
111th Congress, former Congressman Brad Ellsworth of Indiana introduced
very similar versions of this bill. And in the 110th Congress, the
legislation passed the House again by voice vote.
It begs the question what's happening over there in the United States
Senate, but we will continue to pursue this to make sure this
legislation passes.
Also back in the 110th Congress, then-Senator Barack Obama sponsored
the Senate companion, Contractor and Tax Accountability Act, to
Congressman Ellsworth's legislation but, unfortunately, the legislation
did not progress in either Chamber then.
As President, Mr. Obama has continued to fight for the contractors to
be held accountable. I concur with the President on this issue. This is
bipartisan.
We're going to lead and spearhead this effort here in the House of
Representatives and make sure that it becomes law, but the United
States Senate is going to actually have to step up and do something at
some point in life, Mr. Speaker.
This is a good piece of legislation. H.R. 882 establishes the process
through which persons with serious delinquent Federal tax debts may be
prohibited from receiving Federal contracts and grants. The legislation
is designed to mandate that tax compliance be a prerequisite for
receiving a Federal contract or a grant.
As the chairman knows, the Federal Acquisition Regulation, known as
the FAR, was revised in 2008 to require contractors to certify they do
not have delinquent tax debt to the Federal Government. Under the FAR
revision, if a contractor is delinquent, then the standard Government-
wide suspension and debarment process occurs in order to hold the
contractor accountable.
H.R. 882 would, in essence, codify that regulation and provide a
means to verify the contractor's certification. The legislation also
provides broad exceptions for debts being paid in a timely manner, and
debts to which a due process hearing has been requested or is pending.
Like the Federal Employee Tax Accountability Act, to be considered
next, this legislation is meant to affect those thumbing their nose at
Uncle Sam and the United States of America.
The Government Accountability Office, the GAO, has reported that
government contractors owe over $5 billion in unpaid Federal taxes.
Many of the contractors have repeatedly failed to fulfill their tax
obligations and have delinquencies that have extended over multiple tax
periods.
GAO even identified instances in which companies that are delinquent
in their taxes have won contracts by submitting lower offers than
companies that comply with their tax obligations, giving them an undue
advantage.
Those who consciously ignore the channels in place to fulfill their
tax obligations must be held accountable, and they must play on the
same even playing field. This legislation will do just that.
I urge my colleagues to join me in supporting this commonsense,
bipartisan piece of legislation. I again thank Chairman Issa for his
support, as well as Ranking Member Cummings.
Mr. CUMMINGS. Mr. Speaker, I yield 3 minutes to the gentlewoman from
California (Ms. Speier), the cosponsor of this legislation.
Ms. SPEIER. Mr. Speaker, I want to thank the ranking member for
allotting me some time to speak on this bill, and to our chairman, Mr.
Issa, for moving this bill forward, and to my colleague, Mr. Chaffetz
from Utah, who is the author of this measure.
Imagine what our constituents are thinking right now. Imagine if they
really knew that while they're scurrying around trying to get their tax
returns filed on time and making sure they have adequate funds in their
accounts to write out that check, that there are corporations in this
country that continue to get contracts from the United States of
America, even though they don't pay their taxes.
So this bill will ensure that taxpayer dollars due today only go to
responsible contractors who do not have significant debts to the
Federal Government. This bill will make it clear to all contracting
officials: no more tax money for deadbeat contractors.
{time} 1740
As it stands, delinquent contractors are not only eligible for future
contracts, but they actually get them. With one of the largest budgets
in the Federal Government, the Defense Department already has a
reputation for letting contractors fleece taxpayers. And to underscore
this point, when the Defense Department needed a new PR contractor,
they settled on a company that still owed $4 million in taxes. How can
we allow that to happen?
Another company that owed the Federal Government a million dollars in
taxes was paid an additional million dollars as a contractor from the
Department of Defense. Instead of using the money to pay back the
government, what did he do with the money? He bought a boat, some cars,
and a home overseas.
Even the IRS, the agency responsible for collecting our taxes, has
fallen down on the job of making sure that our taxpayer dollars only go
to contractors who have paid them. The Inspector General found the IRS
gave 11 companies $356 million in contracts despite owing millions of
dollars themselves.
So the question is, Why would we reward scofflaws?
Let's get this done this year. And I would suggest to my colleagues
on the other side of the aisle if in fact the Senate is the logjam, if
that's what is going to prevent this from taking effect, let's co-write
a letter to the President of the United States and ask him under his
powers of executive order to take the steps necessary to put this in
place so that we don't continue to have contractors who do not pay
their taxes getting rewarded with contracts by the Federal Government.
Mr. ISSA. Mr. Speaker, at this time I have no further requests for
time, and I reserve the balance of my time.
Mr. CUMMINGS. Mr. Speaker, how much time do I have remaining?
The SPEAKER pro tempore. The gentleman has 14\1/2\ minutes remaining.
Mr. CUMMINGS. Mr. Speaker, I yield 3 minutes to the gentlelady from
Washington, D.C. (Ms. Norton).
Ms. NORTON. Mr. Speaker, I just wanted to thank Mr. Chaffetz and Mr.
Issa for this bill.
Initially, there was a bill involving only Federal employees. And we
had a concern that often when bills come forward for Federal employees,
they are not bills that recognize the substantial funds that
contractors receive. And Chairman Issa and Chairman Chaffetz looked
closely at it and now have come forward with a contractor's bill as
well.
I do want to say in light of the fact that I'm going to oppose the
next bill--
[[Page H2004]]
and I do believe there's a difference between employees and
contractors, and I don't want to get into that right at this moment--I
do want to say that for Federal employees undergoing a pay freeze and
furloughs, there's one thing Uncle Sam can do that apparently hasn't
been done with many contractors. He can garnish wages. And you can bet
your bottom dollar if there's a Federal employee that owes taxes and
you can prove that money is owed to the Federal Government, his pay
will be garnished.
But as we heard the gentlelady from California say, these contractors
continue to receive the largesse--I guess that's how they regard it--of
the Federal Government. It certainly can be distinguished in that way.
But I do believe that the chairman of the full committee and the
subcommittee deserve credit for, in fact, moving at least where they
saw that there should be some equity, that contractors would be treated
similarly to Federal employees.
Mr. ISSA. I continue to reserve the balance of my time.
Mr. CUMMINGS. Having no further requests for time, Mr. Speaker, I
urge Members to vote in favor of this legislation, and I yield back the
balance of my time.
Mr. ISSA. Mr. Speaker, I yield myself such time as I may consume.
I made a decision to bring these two bills separately, rather than
combine them, for a reason. This is not controversial, but failed to
get through the Senate. The other bill has some controversy. But I'd
like to say that in fact I believe that both bills would tell the
American people--both the one related to contractors and the next one
we'll be considering related to Federal employees--that we hold
ourselves to the standard that the American people, the American
taxpayer, expects us to.
So although I know that Ms. Norton does not support the next bill,
but with the kind of vigor and optimism and positive discussion that
we've heard on the previous two bills and on this, I would say that the
important thing for all of us to understand is the money here is
significant; but the principle of holding our contractors, and in the
next bill ourselves, responsible to a high level of integrity and not
having those continue without us taking note of it, I think offers the
same statement to the American people at a time of sequestration, at a
time in which we're questioning how much we can afford from our
government.
For that reason, I want these bills to be considered separately. I
intend to vote for both of them. I believe both of them have merit for
the same reason; but I do thank my colleagues on the other side because
this bill, I believe, is truly without controversy and would be without
controversy. I ask all of those here to note that we, on a unanimous
basis, support H.R. 882. I ask its support, and I yield back the
balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from California (Mr. Issa) that the House suspend the rules
and pass the bill, H.R. 882, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. ISSA. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
____________________